Maputo — One of the world’s largest manufacturers of aluminium cables, Midal of Bahrein, is to set up a factory in Mozambique, using the aluminium ingots produced at the Mozal smelter at Beluluane, in the outskirts of Maputo, as its raw material.
On Friday, Mozal Chairperson Danie Murray and Midal Managing Director Hamid Al-Zhayani signed an agreement under which Mozal will supply 50,000 tonnes of aluminium ingots per year to Midal.
Al-Zhayani signed a separate agreement with Nelson Ventura, the Chief Executive Officer of the Beluluane Industrial Park, allocating land to Midal next to the Mozal smelter.
Al-Zhayani said the factory, costed at 16 million US dollars should be built by June 2014.
It will initially employ 150 Mozambican workers, rising eventually to 400.
Up until now, every gram of the 580,000 tonnes of aluminium produced annually by Mozal has been exported. The deal with Midal means that, for the first time, there will be a downstream industry, using some of the Mozal ingots to produce rods and cables.
The Minister of Industry and Trade, Armando Inroga, who witnessed the ceremony noted that, despite the presence of Mozal, Mozambican industries have still had to import all their cables and other finished aluminium products.
Imported aluminium goods were a significant cost for the construction industry, and for the electricity company, EDM. Inroga hoped that the costs of these components would fall when they were being produced by Midal locally. He added that this would have a positive impact on the country’s balance of trade.
Inroga noted that one of the main criticism of mega-projects such as Mozal is that they produce only for export, and so there is little value added. He believed this was now changing, and that other high technology companies could follow Midal’s example and set up plants in Mozambique.
He urged Mozal and Midal to work with Mozambican educational institutions in order to train Mozambicans to occupy senior positions in both companies.
Murray said that the agreement was “testimony to Mozal’s commitment to developing local industry”, and that downstream plants would “create hundreds of new jobs”.
Al-Zayani stressed that the Friday agreement might only be the start of Midal’s expansion into Mozambique, and that many other Midal subsidiaries, some of them labour intensive, could set up plants in the country.